Myth or Reality: Exposing the Flaws in Fundraising
In Roger Craver’s recent blog post, he challenged the nonprofit industry to “rev up the discussion” around what he calls the clichéd dictum of “mail more, raise more.” He goes so far as to suggest that most direct response fundraisers are buying into the myth that the only way to effectively increase revenue is to mail more. His opinion that the practice of turning to a donor time and time again for financial support is not only flawed, but is practically leading to callous abuse and rising levels of disaffection amongst donors.
You can debate that fundraising strategies are flawed and/or that somehow overly repeated actions can be described as being abusive. Traditional fundraising strategies and even some of the new approaches are often defective in their purpose. If these tactics are repeatedly left unchecked, that could compromise the integrity and credibility of the nonprofit sector overall.
Direct Mail Fundraising
Perhaps the biggest imperfection is thinking that after years of continued contraction, direct mail fundraising can suddenly rebound and produce sustained annual revenue growth, despite year-after-year declines in active donor universes, increased attrition rates, historically low-acquisition response rates and higher annual costs of fundraising. Faced with increased revenue expectations and more aggressive goals and with few, if any, viable new revenue alternatives, fundraisers often have no other choice than to go back the well time and time again. The issue is far too exacerbated for organizations still chasing gross revenue objectives.
In his blog, Craver suggests that nonprofits can mail less and net more—in excess of 40 percent to 60 percent more and actually improve annual retention in the process. Over the years, I’ve been part of many different contact cadence tests and the only thing that could absolutely be concluded is that there is no absolute or universal conclusion. The reason is because there are so many dynamics that influence a
donor’s responsiveness, and the failure to understand them can lead to false or inconsistent conclusions.
The ultimate goal is to discover the most optimized contact cadence for your organization—one that not only produces the greatest amount of net revenue possible each year, but does so without compromising future performance and revenue growth. This is often times a difficult balance to achieve. To do so will require much greater advancements in industry analytics and significantly more dedicated concentration on individual giving motivations, influences, perceptions and attitudes and observed behaviors. As you are on the path to creating a more satisfactory giving environment for individual donors, you don’t need to short-cut the process and draw incomplete conclusions. Be bold and go far beyond your comfort levels or even current competency.
It’s the duty of fundraisers to be stewards of the industry and project its integrity as synonymous with personal integrity. You have a responsibility to create a satisfactory charitable experience for individual donors, requiring the continued evolution and advancement of fundraising tools and solutions. There must be checks and balances, as there could be dire consequences to our industry if fundraisers continue to prioritize financial objectives above creating connected experiences for donors.
In the future, I’ll discuss some the latest innovations in the industry. Check out what’s going on in the U.K. You’ll better understand why Craver is so agitated, and why we need to provoke our industry to be more accountable to each other and to our supporters. If we don’t heed the warning signs, we might not like
Greg Fox is vice president of nonprofit vertical strategy at Merkle. He joined the company in 2000 to establish a data-driven, strategic fundraising agency group. Fox is a 30-year veteran of direct response fundraising, with expertise in developing innovative fundraising marketing strategies and solutions. He has helped raise hundreds of millions of dollars for many of the largest and most respected fundraising brands in America, and while he has broad-based fundraising experience, he is highly regarded as a leader in the national health-charity sector. Prior to joining Merkle, Fox was a founding partner in TheraCom, a leading provider of full-service specialty pharmacy solutions and marketing strategies that served the healthcare and charitable industries. He also served as vice president of direct response fundraising at the National Cystic Fibrosis Foundation, where he started his career and created the organization’s first national direct response program. Fox is an industry thought-leader, frequent speaker at industry conferences and an active participant in the DMA nonprofit federation. He graduated from Virginia Commonwealth University in Richmond, Va.